Y Combinator Podcast: A Conversation with Paul Graham

Full video here.

  • We made something called a web app. At the time it was the first one, that is why the company was called Viaweb (an online store builder). We were not thinking about the benefits of web apps. We were just trying to avoid having to write software on Windows. (2:30) 

  • Building companies is indeterminate. (7:39) 

  • There is no such thing as a lazy founder who builds a large company. (10:04) 

  • Judgment works for some qualities but not others: Intelligent people can judge other intelligent people. But trustworthy people can not judge other trustworthy people. Trustworthy people are often fooled by untrustworthy people. (20:20) 

  • What Y Combinator does is tell founders things that they will ignore. We tell people don't hire too fast and then they go off and hire too fast. And then they come back and say I wish we listened. (22:00) 

  • Startups are counterintuitive. Y Combinator wouldn’t exist if it was obvious what to do. In the beginning do things that don’t scale. It means doing something in a handmade, artisanal way. You learn a lot this way. (23:00) 

  • We made an online store builder. You could build a store on the internet and sell stuff. We’d go to would-be customers and say: Would you like to use our easy online store builder? And they’d say: No! But you want an online store right? And they’d say: Yeah. Ok, what if we use our software to build you an online store. They’d say: yes. (25:12)

  • What makes companies fail most of the time is poor execution by the founders. A lot of times founders are worried about competition. YC has founded 1900+ companies. 1 was killed by competitors. You have the same protection against competitors that light aircraft have against crashing into other light aircraft. Do you know what the protection is? Space is large. (31:30)

  • It is kind of like running 100 meters and suddenly appears another lane with another runner in it. What should you do? Run as fast as you can, like you presumably were. If they are better than you they will win. If not you will.  (32:11)

  • It turns out it is much more important to be determined than smart. If you imagine this hypothetical person that is 100 out of 100 for smart and 100 out of 100 for determination. And then you start taking away determination. It doesn't take very long until you have this ineffectual but brilliant person. Whereas if you take some who is super determined and you take away smartness eventually you get to a guy who owns a lot of taxi medallions, or a trash hauling business, but is still rich. Important note: It only takes one person (of the founding team) to be super determined. (35:14) 

  • How to create a product without much creativity: Follow what will make users happy. Iterate. This will give you the product that is the result of evolution. (37:45)

  • What is the one thing that people who start a company will get wrong? You will shrink from contact with the real world. You won’t release your product because you are scared of the potential negative feedback. Don’t. (41:26) 

  • How do you deal with different levels of commitment between co-founders? Ask yourself if you’d rather have 30% of this person’s brain or 100% of someone else’s. (46:17)

  • Launch as soon as your product has a quantum of utility. This means as soon as there is one person in the world that is glad that you launched because now they could do something they couldn't do. As soon as one person says: Oh here is this thing I can use because I can do X. And before I couldn’t do it. (51:34)